Centrum prasowe

Explanatory comments to 9m 2010 results statement

Agroton Public Limited, leading agricultural producer in eastern Ukraine, comments on its financial results for the nine months of the year ending 30 September 2010, in particular concerning IAS 41 that the Company applies to be in compliance with IFRS.

Key financial highlights

·Total revenue (sum of sales revenue and fair value change) increased by 31% to US $92.1 million (9m 2009: US $70.4 million).

·Gross profit increased by 81% to US $40.6 million (9m 2009: US $22.4 million).

·EBITDA increased by 52% to US $37.7 million (9m 2009: US $24.8 million).

·Net profit increased by 105% to US $24.8 million (9m 2009: US $12.1 million).

As of 30 June 2010 Agroton revalued its crops at fair value. The financial results of the harvesting campaign were reflected in the results for the first 6 months of 2010 (ending 30 June). During the 3 months after 30 June, sales of the revalued inventories (wheat, sunflower, and so forth) took place. Gross profit for the Third Quarter 2010 reflects the fact that most financial results had already been reflected in the First Half 2010 reporting. In order to analyze Agroton’s for the profitability, the performance figures for the first 9 months of 2010 should be considered.

For example

For the 6 months ending 30 June

Company cultivated 114 ths tonnes of wheat and incurred costs of $100 per tonne.

COS = 114 ths tonnes x $172 = $19.6m (this is in accordance with accounting rules under IFRS because inventory was revalued as of June 30, however actual cash cost of sales at the time they occurred = $100).

Gross profit = $0 (because COS increased due to the revaluation of inventories in accordance with IAS 41 IFRS rules).

The company realized the financial result of $8.2m. However, gross profit is equal to $0 under IAS 41 IFRS rules because the revaluation was already reflected in the 6 months ended June 30.